DOJ files fraud suit against Oracle

The U.S. Department of Justice has filed a lawsuit alleging that Oracle Corp. defrauded the government through a software contract that involved hundreds of millions of dollars, after a company whistleblower stepped forward.

The agreement with the General Services Administration, in effect from 1998 to 2006, required the Redwood Shores software giant to extend its commercial discounts to government customers, the DOJ said in a statement released Thursday. The suit claims Oracle misrepresented its sales practices, leaving the government with far inferior deals.

“We take seriously allegations that a government contractor has dealt dishonestly with the United States,” said Tony West, assistant attorney general for the civil division of the DOJ, in a statement. “When contractors misrepresent their business practices to the government, taxpayers suffer.”

The Justice Department brought the complaint under the False Claims Act, which encourages private citizens with knowledge of fraud to file suits on behalf of the government. The lawsuit against Oracle was originally brought by Paul Frascella, senior director of contract services at Oracle, the department said.